Of 130 directors of 17 companies floated on the London Stock Exchange last year, just 15, or 11%, were female, according to Financial News analysis of company IPO filings.

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That does not compare well with existing listed companies. Of the directors on the boards of FTSE 100 companies, 20.4% are female, while 15.1% of FTSE 250 boardroom seats are occupied by women, according to a BoardWatch report published by Professional Boards Forum last month.

These figures suggest that a voluntary target for women to make up at least 25% of FTSE 100 boards by 2015, set in an influential 2011 report by Labour peer Lord Davies, is within reach.

With a string of private companies set to go public in the coming months, industry figures say there is an opportunity to get more women onto listed company boards.

Last year’s data shows, however, that there is work still to be done.

In the run-up to the recent initial public offering of an oil services company, its board, advisers and headhunters searched high and low for a qualified woman to appoint as a non-executive director.

The company recognised that its boardroom line-up was “male and pale”. It wanted more diversity but a suitable candidate could not be found in time, according to a person familiar with the company.

This tale appears far from unusual as the market for initial public offerings in Europe roars back to life.
As a slew of companies come to market, new faces are joining the ranks of Britain’s public company directors.

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Despite a well-documented push for boardroom diversity in recent years, most of those on the boards of companies carrying out an IPO are male.

According to Financial News analysis of company filings, 17 companies were floated on the London Stock Exchange last year with 130 directors, both executive and independent, but just 15, or 11%, were female.

Romanian gas company Romgaz was the only company to list with a female chairman. Royal Mail, the UK postal operator, was the only new listing with a woman chief executive.

A company with a long-established board and a significant history under state ownership, Royal Mail was the company with the greatest number of female board members of any to list in London last year.

Moya Greene, its chief executive, is joined on the 11-member board by senior independent non-executive director Orna Ni-Chionna and non-executives Jan Babiak and Cath Keers.

Eight of the 17 companies to float last year had no women as non-executive directors, while six of those had no female board-level executives either.

“There have been fewer women than you would anticipate,” she said of the data compiled by Financial News.

Richards sits on the board of esure, the UK insurer led by founder and chairman Peter Wood. Dame Helen Alexander is deputy chairman of the company, which completed a £695.1 million flotation last March.

Richards said: “My sense is that Peter really values different ideas around the table. He’s an entrepreneur of decades’ standing and values opinions from different people of different backgrounds. Unquestionably he wanted to put round the table a bunch of experienced business people with different backgrounds.”

She added: “It’s ultimately the chairman’s responsibility. They ultimately have to get it, if there is a major shareholder involved, they have to get that it matters too. Unless they are convinced, then nothing will change.”

Since its IPO, esure has added two more women to its board – María Dolores Dancausa, chief executive of Bankinter in Spain, and Shirley Garrood, a former chief financial officer of investment manager Henderson.

Many of those involved in floating companies say it is difficult to improve the balance of men and women on boards at the time of an IPO.

Women with experience of sitting on the board of a listed company are rare and valuable.

George Kershaw, a founding partner of headhunter Trust Associates, said: “It’s more difficult to come across women, and you do have to work harder. It’s one of the ways headhunters are earning their money. But there are a large number of women with the mental faculties and useful experience.”
There can be other issues in consideration at the time of a flotation.

Adam Young, global co-head of equity advisory at Rothschild, said: “It’s particularly acute at IPO. You’re looking for someone with board experience from before. And here is the conundrum: there aren’t enough women on boards – but in order to have women on boards, it’s helpful to have some board experience. It’s a bit of a catch-22.”

A company and its selling shareholders’ priority at the time of an IPO is that it succeeds in its flotation, bankers say. This requires a board of directors that public market investors feel comfortable with.

Non-executives with experience sitting on the boards of public companies are therefore desirable. It can signal to investors that a company has a team with a good record and will therefore be a safe investment.
Many company boards are brought together, or added to significantly, for the first time ahead of an IPO. This presents an opportunity to add women, which some say is being missed.

Private equity firms often add senior executives to the board of a portfolio company they are looking to float. Of the 130 boardroom seats taken in last year’s IPOs, 16 went to private equity executives behind the companies.

As with other financial services industries, private equity is often dominated by men. Just one of the 16 private equity executives that had boardroom seats in last year’s crop of IPOs was female: Lindsey McMurray, head of RBSEquity Finance, a unit of Royal Bank of Scotland that backed Manchester-based debt buyer Arrow Global, which completed a £207.8 million IPO last October.

One senior banker said: “If you look at the make-up of what the sponsors are like, then they will veer towards being quite conservative.”

Many companies bring new individuals together to form a board of independent non-executive directors for the first time ahead of an IPO. This presents an opportunity to add greater numbers of women.

According to Susan Vinnicombe, director of the International Centre for Women Leaders at the Cranfield School of Management and author of the annual Female FTSE Women on Boards research: “They are brand new boards, so there is no excuse about the size of the board being too big or not wanting to get rid of really good people just to make space for women.”

She added: “They have a blank page and it doesn’t occur to them, despite the mounting evidence, that where you have gender-balanced boards they are better than all-male boards.”
Public company experience is not always required.

Andy Higginson, chairman of Poundland, which announced its intention to float on the London Stock Exchange last week, said: “It’s generally true that there is a limited pool of women with public company board experience, but there is a danger that this becomes self-perpetuating – so you have to look beyond that.”

Poundland, which will complete its approximately £750 million IPO next month, appointed Tea Colaianni to its board last week. An experienced European lawyer, she is also group HR director of Merlin Entertainments, which completed a £1 billion IPO in London last November. She is not a member of Merlin’s board.

Higginson said: “You need sufficient plc experience to give investors confidence, but the most important thing is that it acts as one board, trying to build shareholder value. When you get different perspectives and the conversation around the table isn’t of a narrow retail perspective, and you try and blend personalities, you get a good team ethic.”

--This article first appeared in the print edition of Financial News dated February 24, 2013